The boss of the retailer JD Group has defended receiving a multimillion-pound bonus during the coronavirus pandemic at the same time as the firm accepted almost £100m in government support.
Peter Cowgill, the executive chairman, was awarded almost £6m in bonuses during the 12 months since February 2020, and admitted on Monday that investors might oppose the payout at next month’s annual meeting. But he said he had only received one long-term incentive plan (LTIP) in eight years.
Glass Lewis, one of the world’s largest and most influential investor advisory services, has already recommended that shareholders vote against what it described as an “inappropriate pay policy”.
JD Group, which owns JD Sports, Millets and Blacks as well as a string of overseas sportswear chains, received £61m in furlough payments for staff and an estimated £38m in business rates relief last year.
It has refused to follow in the footsteps of other non-essential retailers including the clothing chain Primark and return the taxpayer cash despite facing criticism for its decision to restart dividend payments to shareholders.
Cowgill insisted that the “lion’s share” of his bonus dated from prior to January 2019, and said the LTIP was a “special arrangement”.
“I have only received one LTIP in eight years, over that period the profits went from £82m to £420m, but I have only received one,” Cowgill said in an interview with BBC Radio 4’s World at One programme.
The retail group had used furlough payments “to retain employment”, Cowgill said, adding that the firm had not made any staff redundant during the pandemic.
Cowgill said JD Sports investors “may well” vote against the company’s remuneration policy but asked: “Why would you when the company has progressed, it has provided increasing levels of employment throughout, it’s expanded internationally, it’s created continued growth?
“I’ve been at the company an awful long time, so I think the investors need to support that because of the track record of the company, which is second to none,” he said.
According to JD Group’s annual report, Cowgill voluntarily took a 75% cut in his basic pay for several months during Covid-19, reducing it to £700,000, while his annual bonus was lowered from £1.7m to £1.3m.
However, the retail veteran banked £3m during the year from a special bonus, half of which was paid in February 2020, with a further £1.5m paid in January 2021. In addition, it is understood that a further £1.5m was paid only a month later.
The first year of the pandemic proved profitable for the sportswear group as it benefited from the lockdown demand for loungewear and trainers, and it reported pre-tax profits before one-offs of £421m on sales of £6.2bn in the year to 30 January 2021.
This is the latest row over executive payouts during the pandemic. Last week 70% of votes cast were against the supermarket group Morrisons’ remuneration report.
There have also been pay protests at the estate agents Savills, its rival Foxtons, Cineworld and AstraZeneca.